Gig economy: the future for deliveries?

The gig economy is continuing to grow rapidly, according to research in the US by the JP Morgan Chase Institute. And the sector growing fastest is transport.

However, the study “The online platform economy 2018: drivers workers, sellers, and lessors, also found that between 2013 and 2017 earnings fell by 53 per cent in the transport sector.

And that begs the question: is this a sustainable or even desirable, development in the market?

On 20th September, “The Independent” reported that hundreds of Uber Eats couriers abandoned their deliveries to protest over pay outside the company’s headquarters in Aldgate East. The newspaper quoted an unnamed courier who said that some couriers were facing a cut from £4.60 a drop to £2.80.

A study by the UCL Centre for Transport Studies found that gig economy drivers were at a heighted risk of traffic accidents.

Over 42 per cent of drivers and riders reported that their vehicle had been damaged as a result of a collision while working, with a further one in ten reporting that someone had been injured. Eight per cent reported that they themselves had been injured, with two per cent saying someone else had been injured.

Two-wheeled couriers also reported worries of being attacked and adverse weather conditions, when their companies would incentivise couriers to go out to work.

Across both two and four-wheeled couriers, only 25 per cent agreed that the company cared about their safety while working.

The majority of those surveyed – 63 per cent – are not provided with safety training on managing risks on the road. Sixty-five per cent said that they are not given any safety equipment such as a high visibility vest and over 70 per cent resort to providing their own.

The UCL report includes a list of recommendations for companies using self-employed couriers and taxi drivers to limit the pressure drivers and riders are under. These include introducing time blocks for couriers to sign up and be paid for, rather than a drop rate. If used, drop rates should take into account the time taken to travel safely within the speed limit and perform administrative functions such as scanning parcels and obtaining signatures.

One of the authors of the report, Professor Nicola Christie, said: “In previous years the UK had a good road safety record, but de-regulation over the last few years has left self-employed couriers and taxi drivers at an increased risk of exploitation.

“I hope to see the recommendations in this report taken on board by the Department for Transport and incorporated into health and safety regulations as the gig economy is set to continue to increase.”

There is clearly a demand for gig economy services – at the right price. But resolving the safety and pay issues could have a significant impact on the cost base of the service.

Not surprising then, that the JP Morgan study concluded there was no evidence that the gig economy is replacing traditional sources of income for most families – and most participants are not putting the gig economy to the type of use that would make it the future of work.

Perhaps the gig economy is more akin to the newspaper delivery rounds that so many of us did as teenagers. Change will be needed if it is ever to be more than that.